NEW DELHI: Honda India is charting out plans to turn around its operations in India by driving in three new models, including a compact SUV.

Faced with high inventory, declining volumes and sudden shift in buyer demand from diesel to petrol variants, Honda India plans to launch hybrid version of the Accord sedan and the global Civic mid-size to revive its fortunes in on one of the fastest growing auto markets of the world.

Yoichiro Ueno, the newly-appointed president and CEO of Honda Cars India, said the mini-SUV segment looks promising. "The growth in the category is significant, and we believe that it will continue. Honda is now considering how to capture the SUV segment," he told TOI.

On slide in sales, he said the company has managed to control some of the issues plaguing the business in India. "When I took charge, we had high inventories... The January-March quarter had been below expectations," Ueno said.​Sudden shift in buyer demand from diesel to petrol variants has also upset the company's strategy. A poor faring by some of the models also made matters difficult, particularly the bad response to Mobilio MPV that was launched in July 2014.

"When I met the dealers, they were suffering from financial situations. They wanted to liquidate inventories," Ueno said. The dealers had been carrying inventory of about 2-2.5 months against healthy levels of three weeks to one month. The company has since corrected the situation by reducing deliveries to dealerships, which perhaps was the reason behind the continued fall in sales.

"There had been a quick shift from diesel to petrol. May be, we had too much focus on diesel. The alignment of production was too late as we thought that the shift towards petrol was temporary," the Honda MD said. Ueno said the situation had been relatively better in the retail market.

Speaking about the problems with the Mobilio, which failed to enthuse buyers, Ueno said the product did not match up to what the market wanted. "We had thought that there would be a strong demand for three-row seating in the private-customer segment... But the customers did not see the benefit. Also, the price was a bit higher than customer expectations."